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"As is" and "As completed"

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teknekjeff

Thread Starter
Sophomore Member
Joined
Sep 25, 2007
Professional Status
Certified General Appraiser
State
California
What is the best way to determine the “as is” value for an office/warehouse property that is in process of being converted to an office? The property was purchased approximately four months ago. The buyer started improving the property, but would now like to finance the construction. Thus, the construction is about 25% complete. The “as completed” value is based on the hypothetical condition that the construction has been completed and the property is an office.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Im still thinking of your original question but remember ... the "as completed" value is a prospective date and not current. Something many fail to recognize.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Based upon the data most likely available to you, you would perform your analysis for the "As Completed" Value first and then deduct to associated costs and expenses to get the property there "As Is". The costs would include not only construction costs, but leasing costs (absorption, tenant improvments, commissions, etc), discounted over time.
 

teknekjeff

Thread Starter
Sophomore Member
Joined
Sep 25, 2007
Professional Status
Certified General Appraiser
State
California
Thanks,

That is how I typically do it.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Im still thinking of your original question but remember ... the "as completed" value is a prospective date and not current. Something many fail to recognize.

Did you miss the OP part about the HC?
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Based upon the data most likely available to you, you would perform your analysis for the "As Completed" Value first and then deduct to associated costs and expenses to get the property there "As Is". The costs would include not only construction costs, but leasing costs (absorption, tenant improvments, commissions, etc), discounted over time.

Howard:new_smile-l:

Correct-ta-lee-oon-doe
 

PL1957

Senior Member
Joined
Jul 19, 2004
Professional Status
Certified General Appraiser
State
Illinois
"discounted over time."
What would the logic be for discounting? I've always been of the opinion that negatives should be deducted at the full dollar amount.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Kenneth

According to "The Saying of Ned Flanders", 7th Edition the term is
Correct-ta-lee-oon-doe, I stand by my statement:Eyecrazy:


 
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